Rockwell Diamonds hits 7-month high after returning to Q1 profit

Rockwell Diamonds Inc. (TSE:RDI) jumped to a 7-month high after the South African miner returned to profit in its fiscal first quarter.

Shares climbed to 43 Canadian cents, the highest intraday price since Dec. 4, and were trading at 40 Canadian cents, up 8.1 percent, at 3:15 p.m. in Toronto.

Net income was C$345,000 in the three-month period ended May 31, compared to a net loss of C$1.2 million, a year earlier, the Johannesburg, South Africa-based company said in a statement late yesterday.

Revenue rose 67 percent year on year to C$15.1 million, with C$9.7 million in direct diamond sales and an additional C$5.4 million from its beneficiation partners.

Production jumped 90 percent to 9,162 carats, with 4,800 carats derived from the company's royalty mining contractors. Inventory at the close of the first quarter totaled 5,237 carats carried forward, including 2,271 carats on royalty mining contracts.

"This is a first, as well as a significant achievement after three years of rebuilding Rockwell," Chief Executive Officer James Campbell said in the statement. "These results also represent the eighth successive quarter of US dollar denominated revenue growth, highlighting the consistent delivery against our plan, which saw our exit from lossmaking operations and the resolution of a number of corporate legacy issues."

Campbell reiterated the company's drive to produce higher-quality diamond, especially from its Middle Orange River project in South Africa. The average stone size produced from all properties increased 18 percent in the first quarter to 4.60 carats compared with 3.80 carats one year earlier.

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